What is Economics?

**Economics**:

Economics is a branch of knowledge concerned with the production, consumption, and transfer of wealth. 

It is the study of scarcity and the use of resources, the production of goods and services, the development of production over time, and the impact of these on the welfare of society and its various complex issues of concern.

**Economics is divided into two categories**:  
1) Microeconomics  
2) Macroeconomics

### Microeconomics:

Microeconomics is a branch of economics that studies the behavior of individuals. 

It is concerned with how supply and demand interact in individual markets for goods and services. 

This approach takes a bottom-to-top method for analyzing the economy. In other words, microeconomics tries to understand human choices, decisions, and the allocation of resources.

### Macroeconomics:

Macroeconomics is concerned with how the overall economy operates. 

It examines issues such as employment, gross domestic product (GDP), and inflation—topics often discussed in news stories and government policy debates. 

Macroeconomics studies how the behavior and policies of a nation affect its overall economy. It deals with the performance, structure, behavior, and decision-making of the entire economy, rather than individual markets or firms. This is why it adopts a top-down approach.